JSW Energy shares tank 7% on weak Q1 earnings; should you buy, sell or hold-

JSW Energy shares tank 7% on weak Q1 earnings; should you buy, sell or hold?

JSW Energy’s share price tanked 7.4% intraday to Rs 282.05 apiece as Q1FY24 earnings disappointed the markets, falling below expectations. Among other analysts, Elara Capital maintained its ‘Sell’ call, however, it raised the target price to Rs 242 apiece. JSW Energy’s Q1FY24 consolidated profit crashed 46% on-year to Rs 290.35 crore as a result of the one-time impact of non-operational expenses from the recent Mytrah buyout and the Ind-Barath 700 MW thermal plant deal under the insolvency route.JSW Energy’s Q1FY24 results

In Q1FY24, JSW Energy’s revenue declined 3.3% on-year to Rs 29,279 million from Rs 30,263 million in the quarter ended June 2023. Due to lower water flow in Q1FY24, net generation from hydro assets fell down 27% on-year. Short term sales in the first quarter declined 5% on-year and the reported PAT declined 47.7% on-year to Rs 2.9 billion in Q1FY24, as well.

Elara Capital: Sell JSW Energy

Earning estimates for FY24E/25E is raised 6%/43% by Elara Capital of JSW Energy, as per the introduction of earnings from Mytrah and Ind Barath projects, the recently acquired projects. Along with this, Elara Capital also raised JSW Energy’s target price to Rs 242 from Rs 193. “We maintain Sell, given expensive valuations. Based on FY25E EV/EBITDA of 9.5X (unchanged), we arrive at a target price of Rs 242,” said the analysts at Elara Capital.